UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission file number 1-4438
O'SULLIVAN CORPORATION
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(Exact name of registrant as specified in its charter)
Virginia 54-0463029
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1944 Valley Avenue, P.O.Box 3510, Winchester, Virginia 22601
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(Address of Principal Executive Offices) (Zip Code)
(540) 667-6666
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(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
At September 30, 1995 there were 16,510,522 shares of Common Stock,
Par Value $1, outstanding.
PART I. FINANCIAL INFORMATION
O'SULLIVAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30, December 31,
1995 1994
ASSETS ------------ ------------
Current Assets
Cash and cash equivalents $ 11,913,830 $ 9,701,801
Receivables 33,400,862 40,367,968
Inventories 41,957,019 32,475,205
Deferred income tax assets 2,724,211 2,642,523
Other current assets 2,359,970 3,485,292
------------ ------------
Total current assets $ 92,355,892 $ 88,672,789
------------ ------------
Property, Plant and Equipment $ 47,299,380 $ 44,605,639
------------ ------------
Intangibles $ 570,804 $ 751,609
------------ ------------
Other Assets $ 10,569,123 $ 10,498,851
------------ ------------
Total assets $150,795,199 $144,528,888
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Current portion of long-term debt $ 48,486 $ 52,073
Accounts payable 17,246,657 16,729,891
Accrued expenses 12,470,791 13,941,121
------------ ------------
Total current liabilities $ 29,765,934 $ 30,723,085
------------ ------------
Long-Term Debt $ 1,790,565 $ 1,652,996
------------ ------------
Other Long-Term Liabilities $ 1,517,320 $ 2,006,974
------------ ------------
Deferred Income Taxes $ 3,591,823 $ 3,503,530
------------ ------------
Commitments and Contingencies $ - - $ - -
------------ ------------
Shareholders' Equity
Common stock, par value $1.00 per share;
authorized 30,000,000 shares $ 16,510,522 $ 16,484,831
Additional paid-in capital 10,183,462 9,963,516
Retained earnings 87,574,364 80,539,058
Cumulative translation adjustments (138,791) (345,102)
------------ ------------
Total shareholders' equity $114,129,557 $106,642,303
------------ ------------
Total liabilities and
shareholders' equity $150,795,199 $144,528,888
============ ============
The accompanying notes are an integral part of the consolidated financial
statements.
O'SULLIVAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
For The Three Months Ended September 30,
---------------------------------------
1995 1994
------------ ------------
Net sales $ 48,551,668 $ 44,696,455
Cost of products sold 39,815,021 36,144,353
------------ ------------
Gross profit $ 8,736,647 $ 8,552,102
------------ ------------
Operating expenses
Selling and warehousing $ 2,170,955 $ 2,674,369
General and administrative 2,046,363 1,564,979
Relocation charge 9,783 - -
------------ ------------
$ 4,227,101 $ 4,239,348
------------ ------------
Income from operations $ 4,509,546 $ 4,312,754
------------ ------------
Other income (expense)
Interest income $ 179,097 $ 8,000
Interest expense (40,089) (201,285)
Other, net 73,574 (89,367)
------------ ------------
$ 212,582 $ (282,652)
------------ ------------
Income from continuing operations
before income taxes $ 4,722,128 $ 4,030,102
Income taxes 1,937,386 1,622,099
------------ ------------
Income from continuing operations $ 2,784,742 $ 2,408,003
------------ ------------
Discontinued operations:
Loss from discontinued
operations, net of taxes $ - - $ (971,299)
Loss on disposal of discontinued
operations, net of taxes - - (8,220,000)
------------ ------------
$ - - $ (9,191,299)
------------ ------------
Net income (loss) $ 2,784,742 $ (6,783,296)
============ ============
Net income (loss) per common share:
Income from continuing operations $ .17 $ .15
Loss from discontinued operations - - (.07)
Loss from disposal of
discontinued operations - - (.50)
------------ ------------
Net income (loss) per common share $ .17 $ (.42)
============ ============
Dividends per common share $ .08 $ .07
============ ============
Average common shares outstanding 16,510,549 16,484,871
============ ============
The accompanying notes are an integral part of the consolidated financial
statements.
O'SULLIVAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
For The Nine Months Ended September 30,
---------------------------------------
1995 1994
------------ ------------
Net sales $160,674,517 $149,128,963
Cost of products sold 128,465,955 119,436,316
------------ ------------
Gross profit $ 32,208,562 $ 29,692,647
------------ ------------
Operating expenses
Selling and warehousing $ 7,907,693 $ 8,917,244
General and administrative 6,078,865 5,206,877
Relocation charge 716,650 - -
------------ ------------
$ 14,703,208 $ 14,124,121
------------ ------------
Income from operations $ 17,505,354 $ 15,568,526
------------ ------------
Other income (expense)
Interest income $ 664,420 $ 33,411
Interest expense (117,732) (688,842)
Other, net (11,474) 101,133
------------ ------------
$ 535,214 $ (554,298)
------------ ------------
Income from continuing operations
before income taxes $ 18,040,568 $ 15,014,228
Income taxes 7,208,461 5,942,115
------------ ------------
Income from continuing operations $ 10,832,107 $ 9,072,113
------------ ------------
Discontinued operations:
Loss from discontinued
operations, net of taxes $ - - $ (125,126)
Loss on disposal of discontinued
operations, net of taxes - - (8,220,000)
------------ ------------
$ - - $ (8,345,126)
------------ ------------
Net income $ 10,832,107 $ 726,987
============ ============
Net income per common share:
Income from continuing operations $ .66 $ .55
Loss from discontinued operations - - (.01)
Loss on disposal of
discontinued operations - - (.50)
------------ ------------
Net income per common share $ .66 $ .04
============ ============
Dividends per common share $ .23 $ .21
============ ============
Average common shares outstanding 16,501,680 16,484,893
============ ============
The accompanying notes are an integral part of the consolidated financial
statements.
O'SULLIVAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For The Nine Months Ended September 30,
---------------------------------------
1995 1994
Cash Flows From Operating Activities ------------ ------------
Net income $ 10,832,107 $ 726,987
Loss from discontinued operations - - 8,345,126
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 5,253,559 5,017,944
Provision for doubtful accounts 362,846 429,349
Interest accrual on zero coupon notes receivable (192,575) - -
Interest accrual on zero coupon notes payable 112,632 102,971
(Gain) loss on disposal of assets (30,091) 3,840
Change in operating assets and liabilities:
Receivables 6,604,260 (7,175,275)
Inventories (9,481,814) 4,565
Other current assets 1,125,322 919,776
Accounts payable 516,766 7,002,142
Accrued expenses (1,635,411) 2,501,199
------------ ------------
Net cash provided by operating activities:
Continuing operations $ 13,467,601 $ 17,878,624
Discontinued operations - - 2,995,183
------------ ------------
Net cash provided by operating activities $ 13,467,601 $ 20,873,807
------------ ------------
Cash Flows From Investing Activities
Purchase of property, plant and equipment $ (7,878,539) $ (4,945,246)
Proceeds from disposal of assets 129,627 19,500
Acquisition of intangible assets - - (141,119)
Decrease in other assets 353,245 125,715
Payments received from non-operating
notes receivable - - 213,827
Other, net (454,194) - -
------------ ------------
Net cash (used in) investing activities:
Continuing operations $ (7,849,861) $ (4,727,323)
Discontinued operations - - (2,995,183)
------------ ------------
Net cash (used in) investing activities $ (7,849,861) $ (7,722,506)
------------ ------------
O'SULLIVAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Continued)
For The Nine Months Ended September 30,
---------------------------------------
1995 1994
------------ ------------
Cash Flows From Financing Activities
Changes in short-term debt $ - - $ (4,700,951)
Net change in line of credit borrowings - - (2,500,000)
Repayment of long-term debt (21,449) (3,824,123)
Purchase of common stock (1,348) (775)
Sale of common stock 246,985 - -
Cash dividends paid (3,629,899) (3,461,512)
------------ ------------
Net cash (used in) financing activities:
Continuing operations $ (3,405,711) $(14,487,361)
Discontinued operations - - - -
------------ ------------
Net cash (used in) financing activities $ (3,405,711) $(14,487,361)
------------ ------------
Increase (decrease) in cash and cash equivalents $ 2,212,029 $ (1,336,060)
Cash and cash equivalents at beginning of period 9,701,801 2,830,015
------------ ------------
Cash and cash equivalents at end of period $ 11,913,830 $ 1,493,955
============ ============
The accompanying notes are an integral part of the consolidated financial
statements.
O'SULLIVAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note A. Basis of Financial Statement Preparation
The accompanying unaudited consolidated financial statements
include the accounts of O'Sullivan Corporation and its wholly-
owned subsidiaries. All material intercompany accounts and
transactions have been eliminated in consolidation.
In the opinion of management of the Corporation, the unaudited
consolidated financial statements contain all material
adjustments necessary to fairly present the Corporation's
financial position as of September 30, 1995 and December 31, 1994
and the results of its operations and cash flows for the three
and nine months ended September 30, 1995 and 1994. Such
adjustments consist only of normal recurring items.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally
accepted accounting principles have not been included with these
statements. These statements should be read in conjunction with
the financial statements, notes and other disclosures thereto
included in the Corporation's 1994 Annual Report to Shareholders
and Form 10-K.
The results of operations for the three and nine months ended
September 30, 1995 are not necessarily indicative of the
operating results for the full year.
Note B. Discontinued Operations
On December 2, 1994, the Corporation sold certain specified
assets of the Corporation's Gulfstream Division to Automotive
Industries Holding, Inc. The assets sold consisted primarily of
property, plant and equipment, inventories and the capital stock
of Capitol Plastics of Ohio, Inc., a subsidiary of O'Sullivan
Corporation. In addition, certain specified liabilities,
consisting primarily of employee compensation payables were
assumed by Automotive Industries Holding, Inc. The Corporation
received $46,656,382 in cash and $4,000,000 in an unsecured note
receivable for the net assets sold.
The loss on disposal of the division of $8,220,000 (net of income
tax benefit of $5,480,000) represents the loss on disposal of the
assets of the division, along with expenses associated with
disposal activities, including severance costs, environmental
clean-up costs, professional fees and various other costs
associated with the disposal, net of the operating income of
$1,400,000, during the phase-out period.
Net loss from the discontinued operations of the Gulfstream
Division for the three and nine months ended September 30, 1994
is shown separately in the accompanying income statements. The
income tax (benefit) applicable to the three and nine months
ended September 30, 1994 was $(634,339) and $(86,439),
respectively.
Net sales of the Gulfstream Division were $37,773,755 for the
quarter ended September 30, 1994 and $120,604,004 for the nine
months ended September 30, 1994. These amounts are not included
in the net sales in the accompanying income statements for the
three and nine months ended September 30, 1994.
Note C. Receivables
Receivables are presented net of an allowance for doubtful
accounts of $1,341,382 at September 30, 1995 and $884,467 at
December 31, 1994. Receivable balances for automotive related
business were $14,741,360 at September 30, 1995 and $9,507,357 at
December 31, 1994.
Note D. Inventories
At September 30, 1995 and December 31, 1994, inventories were
comprised of the following:
September 30, December 31,
1995 1994
------------ ------------
Finished goods $ 10,488,938 $ 8,848,411
Work in process 12,911,604 7,581,465
Raw materials 14,862,439 13,163,840
Supplies 3,694,038 2,881,489
------------ ------------
$ 41,957,019 $ 32,475,205
============ ============
Slow-moving inventories at September 30, 1995 amounted to
$1,583,865 less a reserve of $268,634. At December 31, 1994 slow-
moving inventories amounted to $1,044,138 less a reserve of
$329,906. Slow-moving inventories is an estimate of inventory
held in excess of twelve month's requirements, based on
historical sales volumes.
Note E. Property, Plant and Equipment
At September 30, 1995 and December 31, 1994, property, plant and
equipment were comprised of the following:
September 30, December 31,
1995 1994
------------ ------------
Land $ 1,263,672 $ 1,243,761
Buildings 25,481,443 23,980,895
Machinery and equipment 67,209,045 61,457,280
Transportation equipment 3,508,623 3,533,039
------------ ------------
$ 97,462,783 $ 90,214,975
Less accumulated
depreciation 50,163,403 45,609,336
------------ ------------
$ 47,299,380 $ 44,605,639
============ ============
Note F. Accrued Expenses
At September 30, 1995 and December 31, 1994 accrued expenses were
comprised of the following:
September 30, December 31,
1995 1994
------------ ------------
Accrued compensation $ 2,384,657 $ 2,367,513
Employee benefits 2,502,205 1,989,047
Dividends payable 1,318,695 1,153,614
Contingency reserve for
discontinued operations 2,640,602 5,543,042
Other accrued expenses 3,624,632 2,887,905
------------ ------------
$ 12,470,791 $ 13,941,121
============ ============
Note G. Debt
Short-Term Debt
Melnor Inc., a subsidiary of the Corporation had short-term debt
at December 31, 1994 consisting of a revolving credit facility
("revolving loan") with a financial institution in an aggregate
amount not to exceed $15,000,000 that would have expired March 3,
1996, and would have been automatically renewed for one year
periods thereafter, unless terminated by either party.
Termination occurs (180) days after notification. The loan was
collateralized by substantially all assets of Melnor Inc. and the
maximum principal amount outstanding at any one time was based on
a formula using the carrying values of eligible accounts
receivable and inventory. Interest was payable monthly at a
fluctuating rate equal to prime plus 1.25%, but at no time would
the rate be less than 6%. The rate at December 31, 1994 was
9.75%. The loan agreement also provided for certain financial
covenants, all of which were waived by the lender. In December,
1994, the loan was paid off and the lender was given notice that
Melnor Inc. intended to terminate the loan.
Long-Term Debt
September 30, December 31,
1995 1994
------------- -------------
Unsecured non-interest bearing
promissory note payable to Melnor
Industries, Inc., discounted at
9.0% due on November 24, 1996. The
principal amount of the note is
$1,622,791. $ 1,456,043 $ 1,360,945
Non-interest bearing obligation
payable to Melnor Industries, Inc.
discounted at 9.0%. Payment is
contingent upon Melnor Industries,
Inc. satisfying its obligations
September 30, December 31,
1995 1994
------------- -------------
under the New Jersey Environmental
Cleanup Responsibility Act and the
release by the State of the escrow
fund of $300,000 established to
fund environmental cleanup
activities. 270,206 252,632
Notes payable from Melnor Inc. to
equipment finance companies due in
monthly payments totaling $223
including interest at rates from
4.9% to 5.1%. The notes are
secured by equipment with a
book value of $10,561. 6,281 7,754
Capital lease obligations 106,521 83,738
------------- -------------
$ 1,839,051 $ 1,705,069
Less current maturities 48,486 52,073
------------- -------------
$ 1,790,565 $ 1,652,996
============= =============
Note H. Supplemental Cash Flow Information
Supplemental Disclosure of Cash Flow Information
For the Nine Months Ended September 30,
---------------------------------------
1995 1994
---------- ----------
Cash payments for interest,
net of interest capitalized $ 6,097 $1,970,758
========== ==========
Cash payment for income taxes $6,236,454 $5,470,173
========== ==========
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations (Third Quarter, 1995 versus Third Quarter, 1994)
Consolidated Operating Results
O'Sullivan Corporation consolidated net sales from continuing operations
for the third quarter of 1995 were $48.6 million compared to $44.7 million
for the third quarter of 1994, an increase of 8.6%. Consolidated net
income from continuing operations was $2.8 million for the third quarter of
1995 and $2.4 million for the third quarter of 1994, an increase of 15.6%.
Plastics Products Segment Operating Results
Net sales for the Plastics Products segment were $42.0 million for the
third quarter of 1995 and $37.0 million for the third quarter of 1994. The
1995 sales represent an increase of $5.0 million (13.5%). Approximately
90% of the sales increase was from automotive products. The sales
increase for the quarter as compared to 1994 is primarily a result of
product mix changes, particularly in automotive products, to shipments of
products with higher incremental prices. Competitive pressures in the
markets in which this segment operates continue to preclude virtually any
unit price increases except as pass-throughs of raw material price
increases.
The gross margin for this segment showed an improvement over the third
quarter of 1994 (19.5% versus 17.8%). The improvement was primarily a
result of lower labor and variable manufacturing costs as a percent of
sales.
Selling expenses for the third quarter of 1995 were $1.1 million,
representing 2.7% of net sales. Selling expenses for the third quarter of
1994 were $1.5 million, representing 4.1% of net sales for the segment.
The reduction in selling expenses both in amount and as a percentage of net
sales is primarily a result of consolidations within the selling area which
reduced compensation and commission costs.
General and administrative expenses for the third quarter of 1995 were $1.5
million as compared to $1.1 million for the third quarter of 1994. As a
percent of net sales these expenses were 3.5% for 1995 and 2.9% for 1994.
Other income of this segment showed an increase over the third quarter of
1994 of $146 thousand. The increase resulted primarily from increased
interest income.
Consumer Products Segment Operating Results
Net sales were $6.6 million for the Consumer Products segment for the third
quarter of 1995. Net sales for the third quarter of 1994 were $7.7
million. The net sales for 1995 represents a decrease of $1.1 million
(14.9%). Changes in customer purchasing patterns and unfavorable weather
conditions caused sales to fall considerably below budgeted levels for the
period.
This segment suffered a marked decline in its gross margin for the third
quarter of 1995 (15.6%) as compared to the third quarter of 1994 (20.4%).
The decline was due to increased rework costs of purchased components,
increases in raw material prices, excess freight costs to insure timely
delivery of products from off-shore sources and higher than anticipated
import duties.
Selling expenses for this segment of $1.1 million represented 16.1% of net
sales for the third quarter of 1995 as compared to $1.2 million
representing 15.1% of net sales for the third quarter of 1994. The
reduction in expense was primarily related to lower sales commissions and
advertising costs.
General and administrative expenses for the segment for the third quarter
of 1995 were $581 thousand compared to $486 for the third quarter of 1994.
During the third quarter of 1995 the segment recorded an expense of $10
thousand in connection with the relocation of US operations.
Interest expense associated with this segment was $40 thousand for the
third quarter of 1995 and $201 thousand for the third quarter of 1994. The
reduction in expense can be attributed to the utilization of funds received
from the sale of the Corporation's Gulfstream Division to pay back funds
borrowed under several credit arrangements available to this segment.
Income Taxes
Income tax expense for continuing operations was $1.9 million for the third
quarter of 1995 and $1.6 million for the third quarter of 1994. The
increase in income tax expense is related to higher taxable income levels
for the period. The effective tax rate for both years was basically the
same. (41.0% for 1995 and 40.2% for 1994).
Results of Operations (Nine Months Ended September 30, 1995 versus
Nine Months Ended September 30, 1994)
Consolidated Operating Results
O'Sullivan Corporation consolidated net sales from continuing operations
for the nine months ended September 30, 1995 were $160.7 million compared
to $149.1 million for the first nine months of 1994, an increase of 7.7%.
Consolidated net income from continuing operations was $10.8 million for
the first nine months of 1995 and $9.1 million for the nine months ended
September 30, 1994, an increase of 19.4%.
Plastics Products Segment Operating Results
Net sales for the Plastics Products segment were $127.7 million for the
first nine months of 1995 and $111.9 million for the first nine months of
1994. The 1995 sales represent an increase of $15.8 million (14.1%).
Approximately 55% of the sales increase was from automotive products. As
in the case of third quarter results, the sales increase for the nine
months of 1995 as compared to 1994 is primarily a result of product mix
changes resulting in shipments of products with higher incremental prices.
As mentioned in the third quarter analysis, competitive pressures in the
markets in which this segment operates continue to preclude virtually any
unit price increases except as pass-throughs of raw material price
increases.
The gross margin for this segment showed an improvement over the first nine
months of 1994 (20.4% versus 19.1%). Reductions in labor costs and
variable manufacturing costs offset increases in material costs experienced
during the period.
Selling expenses for this period of 1995 were $3.8 million, representing
2.9% of net sales. Selling expenses for the first nine months of 1994 were
$4.4 million, representing 3.9% of net sales for the segment. The
reduction in selling expenses both in amount and as a percentage of net
sales is primarily a result of consolidations within the selling area which
reduced compensation and commission costs.
General and administrative expenses for the first nine months of 1995 were
$4.4 million as compared to $3.6 million for the first nine months of 1994.
As a percent of net sales these expenses were 3.5% for 1995 and 3.3% for
1994.
Other income of this segment for the first nine months of 1995 increased by
$263 over the first nine months of 1994. Interest income increased by
approximately $630 thousand due to the investment of funds received from
the sale of the Gulfstream Division. This increase was offset by income
reductions in other miscellaneous income categories.
Consumer Products Segment Operating Results
Net sales were $33.0 million for the Consumer Products segment for the nine
months ended September 30, 1995. Net sales for the first nine months of
1994 were $37.3 million. The net sales for 1995 represents a decrease of
$4.3 million (11.4%). Changes in customer purchasing patterns, unfavorable
weather conditions in the second and third quarters and production delays
by suppliers during the first quarter of 1995 served to reduce sales
substantially below expected levels for the first nine months of 1995.
Gross profits margins for the nine months ended September 30, 1995 and 1994
were substantially the same.
Selling expenses for this segment of $4.2 million represented 12.6% of net
sales for the first nine months of 1995 as compared to $4.5 million
representing 12.1% of net sales for the nine months ended September 30,
1994. Lower selling commissions due to reduced sales levels and lower
advertising outlays were the major reasons for lowered selling costs
compared to 1994.
General and administrative expenses for the segment for the nine months
ended September 30, 1995 and 1994 were both $1.6 million.
The segment recorded an expense of $717 thousand during the nine months
ended September 30, 1995 in connection with the relocation of US
operations. The segment expects to incur a total cost of approximately
$850 thousand in connection with the relocation.
Interest expense associated with this segment was $118 thousand for the
first nine months of 1995 and $686 thousand for the nine months ended
September 30, 1994. The reduction in expense can be attributed to the
utilization of funds received from the sale of the Corporation's Gulfstream
Division to pay back funds borrowed under several credit arrangements
available to this segment.
Income Taxes
Income tax expense for continuing operations was $7.2 million for the nine
months ended September 30, 1995 and $5.9 million for the first nine months
of 1994. The increase in income tax expense is related to higher taxable
income levels for the period. The effective tax rate for both years was
basically the same. (40.0% for 1995 and 39.6% for 1994).
Liquidity and Capital Resources
Cash flows for the nine months ended September 30, 1995 resulted in a net
increase in cash and cash equivalents of $2.2 million. Cash flows
continue to be hampered by increases in inventories since December 31,
1994. The Plastics Products segment has increased certain elements of its
inventories to enhance machine utilization and to meet requirements for the
launch of certain automotive-related programs. The Consumer Products
segment has experienced increased inventory levels caused primarily by the
significant reductions in customer demand due to weather-related problems
through September 30, 1995.
Net cash provided by operating activities of continuing operations was
$13.5 million for the first nine months of 1995 as compared to $17.9
million for the first nine months of 1994.
Capital outlay was $7.9 million for the nine months ended September 30,
1995. Current capital expenditures are primarily to provide additional
capacity and modernize present equipment to produce products for which
orders currently exist. Management estimates that total capital outlay for
1995 will be between $8.5 and $10 million.
Total corporate debt was $1.8 million at September 30, 1995 and $41.0
million at September 30, 1994. The reduction was accomplished through
improved profitability and the use of funds received from the sale of the
Corporation's Gulfstream Division. The Corporation still has in place a
$35 million line of credit to provide capital to finance capital outlay
and/or acquisitions.
Management believes that net cash flow from operating activities, along
with available financing capabilities will be adequate to meet the
Corporation's funding requirements for 1995 and the foreseeable future.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
3.1 O'Sullivan Corporation Amended and Restated Articles of
Incorporation, including the Articles of Amendment, dated
April 30, 1985, filed with the State Corporation
Commission of Virginia on May 6, 1985, adopted by
stockholders of O'Sullivan Corporation at the annual
meeting held April 30, 1985. (Incorporated by reference
to the March 31,1985 Quarterly Report on Form 10-Q of the
Corporation.)
3.2 O'Sullivan Corporation Bylaws as amended to January 29,
1985. (Incorporated by reference to the March 31, 1985
Quarterly Report on Form 10-Q of the Corporation.)
3.3 O'Sullivan Corporation Amended and Restated Articles of
Incorporation dated April 25, 1989, filed with the State
Corporation Commission of Virginia on May 5, 1989,
adopted by stockholders of O'Sullivan Corporation at the
annual meeting held April 25, 1989. (Incorporated by
reference to the March 31, 1989 Quarterly Report on Form
10-Q of the Corporation.)
27 Article 5 of Regulation S-X, Financial Data Schedule for
the third quarter Form 10-Q.
99.1 The O'Sullivan Corporation 1995 Stock Option Plan filed
as exhibit 99.1 to the Corporation's Form S-8
registration statement (Registration Number 033-58895)
filed with the Commission on April 28, 1995 and
incorporated herein by reference.
99.2 The O'Sullivan Corporation 1995 Outside Directors Stock
Option Plan filed as exhibit 99.2 to the Corporation's
Form S-8 registration statement (Registration Number 033-
58895) filed with the Commission on April 28, 1995 and
incorporated herein by reference.
99.3 1985 Incentive Stock Option Plan, Amended and Restated
as of July 27, 1993. (Incorporated by reference to the
Annual Report on Form 10-K for the Year Ended December
31, 1993.)
(b) Reports on Form 8-K - No reports on Form 8-K were filed during
the quarter ended September 30, 1995.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
O'SULLIVAN CORPORATION
/s/ James T. Holland
----------------------
James T. Holland
President and Chief Operating
Officer
/s/ C. Bryant Nickerson
------------------------
C. Bryant Nickerson
Secretary, Treasurer
and Chief Financial Officer
November 9, 1995
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